South-Western Legal Studies in Business

Buyer Has Remedy Against Seller, Not Manufacturer, in Case of Revocation of Sale
Description Appeals court affirmed that when a buyer revokes a sale, which places the parties in the position they were before the sale occurred, the cause of action is against the seller of the goods, not the manufacturer, even if defect of the goods is the primary reason for the revocation.
Topic Sales
Key Words Revocation; Seller; Manufacturer; Privity
C A S E   S U M M A R Y
Facts The Neals bought a new Beaver Marquis Motor Coach from R&K Camping Center for $290,000. The vehicle had numerous problems that could not be corrected to the Neals’ satisfaction. They sued R&K and Beaver for breach of contract, breach of express and implied warranties, and revocation of the sale under §2.608 of the UCC. The jury found for the Neals on the revocation of acceptance claim only and awarded them $75,000 in attorney’s fees. The trial court held that the Neals could not recover from Beaver on the revocation of acceptance cause of action. The Neals appealed.

Affirmed. “Unlike a claim of warranty that seeks a fix for defective goods or damages, a revocation … cancels a contract of sale and returns the goods to the seller and the purchase price to the buyer. It places the parties in the same position as before the sale. A manufacturer, having no part in the sales transaction, would have no part in returning the parties to a status quo.” Under §2-608, a revocation is a remedy available to the buyer only against the seller. In the absence of privity, the buyer has no cause of action against the manufacturer.

Citation Neal v. SMC Corporation, 99 S.W.3d 813 (Ct. App., Tex., 2003)

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